Mankind Pharma board approves raising of ₹10,000 cr via private placement

Pharmaceutical major Mankind Pharma Ltd's board today approved the raising of funds worth ₹10,000 crore via private placement. The company says it will issue 5 lakh rupee-denominated secured, rated and listed NCDs with a nominal value of ₹1 lakh each totalling ₹5,000 crore. The company will also issue listed and rated commercial paper having a face value worth ₹5,000 crore.

"Up to 500,000 INR denominated, secured, rated and listed non-convertible debentures with nominal value of INR 100,000 each, aggregating to not more than INR 50,000,000,000 in 3-4 distinct series with maturities of up to 48 months; and listed and rated commercial paper having face value as may be decided in accordance with applicable law, for an aggregate financing amount of not exceeding INR 50,000,000,000 (the “CP”), in one or more tranches or series," Mankind Pharma says in an exchange filing today.

The company board had announced to raise funds via these routes on September 20, 2024.

Shares of Mankind Pharma Ltd are trading down 1.70% at ₹2,547.05 on the BSE today. The share opened a gap up and hit the day's high at ₹2,608.35, up 0.6%, taking the company's m-cap to ₹1,02,064.09 crore. The shares are currently trading 8.4% lower than the one-year high of ₹2,780 touched on September 24, 2024.

Shares of Mankind Pharma have surged 41.61% in the past year, while the year-to-date gains stand at ₹28.69%. In the past six months, and one month, the scrip has risen 10.16% and 6.51%, respectively.

Mankind Pharma, which sells condom brand Manforce and pregnancy test kit Prega News, posted double-digit growth in its top and bottom line in the April-June quarter of the current fiscal, aided by a spurt in volume. The country’s fourth largest pharmaceutical company posted a net profit of ₹543 crore for the first quarter ended June 2024, up 10% from ₹494 crore in Q1 FY24. The revenue from operations of the homegrown pharma major rose 12% year-on-year (YoY) to ₹2,893 crore in Q1 FY25 compared with ₹2,579 crore in the same period last year. On the operating front, EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at ₹681 crore, up 4% YoY, while margins dropped by 188 basis points to 23.54%. The revenue from domestic business rose 9% YoY to ₹2,634 crore, constituting around 91% of the total revenue.

In its August 27 commentary, brokerage major Motilal Oswal said the pharma company has a "strategic roadmap" for growth through expansion in high entry barrier innovative product launches in the chronic/consumer segment and other adjacencies, transitioning from sexual wellness to consumer wellness in the over-the-counter (OTC) space. "Overall, we expect a 14% earnings CAGR over FY24-26, fueled by an 11% sales CAGR and a 180bp margin expansion. We value MANKIND at 42x 12m forward earnings to arrive at our TP of INR2,760. Reiterate BUY."